Japan reboots DOGE-style spending review to fund Takaichi pledges
EWJ•Japan will widen its spending review to examine 201 special-purpose government funds holding an estimated 7 trillion yen ($44.35 billion), seeking funds for Prime Minister Sanae Takaichi’s pledges. The first review proposed abolishing three of roughly 120 tax breaks examined.
1. Review widens scrutiny
Japan’s government said it would reboot its DOGE-style spending review, shifting its focus to special-purpose public funds and subsidies. The initiative follows an earlier review of special tax measures that produced three abolition proposals from roughly 120 tax breaks reviewed by ministries.
2. Funds and fiscal plans
The 201 special-purpose funds are estimated to hold about 7 trillion yen at the end of the next fiscal year. The plan calls for idle or long-unused money to return to the national treasury and for stricter cost-benefit assessments of subsidy programs. The government is seeking funding for a planned consumption tax cut on food from April 2027, while facing demands for more defense and industrial policy spending.
3. Debt and budget pressure
The review’s findings are expected to inform year-end tax reform talks and budget negotiations. Japan’s 10-year government bond yield has reached multi-decade highs amid concerns that Takaichi’s spending plans could increase debt issuance. Takaichi has pledged to cap new debt issuance at around 40 trillion yen, while requests for next year’s budget reached a record 143 trillion yen.
